UBS Shakes Up Investment Bank Management

The new head of UBS's
investment bank has stamped his mark on the division
with a management reshuffle, days after the Swiss bank said it
was pulling back from fixed income trading and cutting 10,000
jobs.

The new head of UBS's
investment bank has stamped his mark on the division
with a management reshuffle, days after the Swiss bank said it
was pulling back from fixed income trading and cutting 10,000
jobs.

Andrea Orcel, a dealmaker poached from Bank of America
Merrill Lynch earlier this year, has moved co-head of
the investment banking advisory business Simon Warshaw to a new
role, according to a memo seen by Reuters.

UBS's new corporate client solutions division - which will
house its merger and acquisitions advisory business, and the
teams helping with stock market listings, bond issues and other
types of financings - will also now be split along regional
rather than product lines, the memo showed.

Orcel became sole head of the investment bank last week
after former co-head Carsten Kengeter, in charge at the time of
a $2.3 billion rogue trading scandal last September, stepped
aside to oversee the winding down of the fixed income business.

Tougher regulations and capital constraints forced UBS's
hand, making it the first bank to pull back so drastically in
this area, although rivals have also cut back activities such as
equities trading, where volumes and margins are thin.

"With this announcement, we closed the strategic debate,"
Orcel said in the memo, referring to last week's changes. The
10,000 job cuts will fall across the group, although the
investment bank will be hit hardest.

Orcel's arrival over the summer raised fears within UBS that
an "old guard" of bankers would be moved aside, with his allies
given choice jobs. The Italian was followed to UBS by several
BofA ML bankers.

But Orcel has picked UBS veteran David Soanes, a capital
markets specialist, to run corporate client solutions in Europe,
the Middle East and Africa (EMEA), the memo showed.

In the Americas he had turned to senior investment banker
Steve Cummings, while Matthew Grounds, who had run the global
investment banking advisory business with Warshaw, will be in
charge of the advisory and financing business for Asia Pacific.

"David Soanes is a UBS-lifer but he is pragmatic and has the
'star potential' that Orcel looks for in bankers," said one UBS
banker in EMEA.

Orcel also gave a key role to newer arrival Rajeev Misra, a
former Deutsche Bank executive who had run fixed income - the
division encompassing bond and rates trading which is now out of
favour - and helped build it up in the past three years.

Misra will run financial solutions globally.

Roberto Hoornweg, who was also responsible for fixed income,
currencies and commodities (FICC), has resigned, a spokesman for
UBS confirmed.

Warshaw, seen by many internally as one of the pillars of
the Swiss bank's famed advisory business which UBS inherited
with SG Warburg - an investment bank it bought in 1995 - will
report to Orcel, working on "certain initiatives" to develop the
corporate client solutions' group in EMEA.

UBS's trading businesses will come under the investor client
services group, and will contribute two-thirds of total revenues
in the investment bank, the memo said. The existing global head
of equities Mike Stewart will remain in that position.

Chris Vogelgesang and George Athanasopoulos will run foreign
exchange and precious metals, the main business lines to survive
from the former FICC business. Chris Murphy was named as global
head of rates and credit.

It wasn't all bad luck for the capital markets this week: Hedge funds had a decent first quarter despite a slowdown in jobs numbers, BlackRock might be heading into new territory as hedge fund managers take a hard look at their counterparties, and the head of the IMF didn't pull any punches when assessing today's global economy. At least we can admire the nice weather and some of the best quotes of the week.